Introduction of the mortgage backed security (MBS) has made the dream of owning a home possible for a much larger number of individuals. Frequently, when a borrower takes out a loan to purchase a home, that loan is subsequently pooled with other loans and used to create an MBS. The MBS is an investment instrument that can be sold to investors in the global capital markets. Upon sale of the MBS, lenders can turn around and make new loans using proceeds from the sale. In effect, the MBS is a way for the global capital markets to provide capital for loans to fund home ownership. The increased availability of capital reduces interest rates as compared to the interest rates that would otherwise be available, and therefore makes home ownership more affordable for an increased number of individuals.
While the mortgage backed security approach has worked exceptionally well, home ownership rates could be further improved if new forms of mortgage backed securities could be created that more optimally align with investor needs. A more optimal alignment would result in further increases in the availability of capital, further reductions in interest rates, lower cost mortgages, and ultimately increased home ownership rates. Additionally, it is desirable to have tools to support the creation and maintenance of mortgage backed securities through the cooperation of lenders, investors, loan servicers and others. Although certain needs are described herein, it should be understood that the techniques described and claimed herein may also be applied to meet other needs instead of or in addition to the above needs.